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Like scarcity, needs and wants, and junk like that,[object Object],Basic Econ Concepts,[object Object]
Needs and Wants,[object Object]
Scarcity,[object Object],“Limited quantities of resources to meet unlimited wants.”,[object Object],What’s that mean?,[object Object]
Scarcity,[object Object],Your wants are pretty much unlimited. ,[object Object],Even if yours personally aren’t, once you add up everybody in the population, the collective wants are unlimited.,[object Object],All resources, goods, and services are limited, however.,[object Object],This means it’s impossible for all the wants to be met.,[object Object]
Scarcity,[object Object],Economics, then, tries to solve the problem of scarcity.,[object Object],This doesn’t mean to make unlimited stuff, but figuring how to distribute scarce, limited stuff in the best way to meet wants.,[object Object],It also wants to see how people satisfy needs and wants by the choices they make.,[object Object],Why X and not Y?  Why McDonald’s?  Why did banks buy mortgage-backed securities?  Why TXU and not Gexa?  Why Crocs?,[object Object],Seriously… why Crocs?,[object Object]
Basic Economic Concepts
Basic Economic Concepts
Goods and Services,[object Object],Goods,[object Object],Stuff.,[object Object],Services,[object Object],Things people do for others.,[object Object]
Shortage,[object Object],When there isn’t enough stuff.,[object Object],Not enough of a product can be supplied or it won’t be supplied. At least not at current prices.,[object Object],If prices go up, it may become profitable for somebody to provide the good or service and that will eliminate the shortage.,[object Object]
Factors of Production,[object Object],Land, Labor, Capital,[object Object],These have specific meanings in economics.,[object Object]
Land,[object Object],All natural resources used to produce goods and services.,[object Object]
Labor,[object Object],Work people get paid for.,[object Object]
Capital,[object Object],Human-made resources used to produce stuff or provide services.,[object Object],Note this is different from land, which is natural resources.,[object Object],Two types: Physical and Human.,[object Object]
Physical Capital,[object Object],Non-human assets used by real humans in production.,[object Object],Whoa!  Check out that physical capital!!!,[object Object]
Physical Capital,[object Object],This includes things like buildings, factories, equipment, computers, paper, copy machines, etc.,[object Object],Typically, this increases productivity since you can do more of X and more time is freed up to pursue Y.,[object Object],Not so much.,[object Object]
Human Capital,[object Object],The education, experience, abilities, and knowledge of an employee.,[object Object],These have economic value.,[object Object],Not all labor is equal in value.,[object Object]

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